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UPDATE 2-Nearly all customers of British energy supplier SSE on expensive tariffs -Ofgem
December 14, 2016 / 5:17 PM / a year ago

UPDATE 2-Nearly all customers of British energy supplier SSE on expensive tariffs -Ofgem

* SSE has 91 pct of customers on standard tariff

* Energy companies should not penalise loyalty - energy min

* Big Six SVTs around 132 pounds more expensive than cheapest deal

* Centrica most exposed to SVT switching - Jefferies

* Customer switching from small supplier to Big Six rises (Adds Energy Secretary comments)

By Karolin Schaps and Susanna Twidale

LONDON, Dec 14 (Reuters) - Nearly all customers of Britain’s second-biggest energy supplier, SSE, are paying standard tariffs rather than cheaper rates on offer, a league table published by regulator Ofgem showed on Wednesday.

The table, which for the first time records how many customers pay more expensive tariffs, showed that 91 percent of SSE’s customers are paying a standard tariff. That is by far the largest percentage among the country’s Big Six suppliers, with Centrica’s British Gas in second spot at 74 percent.

So-called standard variable tariffs (SVTs) are basic rates that energy suppliers charge if a customer does not choose a specific tariff, a mechanism put in place to ensure consumers are always supplied with energy.

Many consumers who have never switched supplier are on these default, more expensive tariffs.

Energy bills have doubled in Britain over the past decade to an average of around 1,200 pounds ($1,525) a year, and the government has said it could intervene in the market if it believes prices are too high.

Energy Secretary Greg Clark said on Wednesday that he didn’t want to see energy companies penalise loyal customers.

“I think the companies have a job to do to persuade the public that they are not taking advantage of loyalty,” he told a parliamentary committee.

On average, the Big Six’s SVTs are 132 pounds ($167) more expensive than their cheapest tariffs, the league table showed.

“We regularly tell customers about the cheapest tariff available to them so they can make informed decisions,” said an SSE spokesman, adding the company’s retail profit margin is around 5 percent.

The league table also showed that Innogy-owned Npower has the highest difference among the biggest suppliers between its SVT and cheapest tariff at 261 pounds.

Other Big Six energy suppliers are Iberdrola’s Scottish Power, E.ON and EDF Energy.

The table reflects the fact that over the past two years millions of customers have moved away from big providers to smaller companies.

The percentage of SVT customers at some of the small suppliers is as low as 9 percent in the case of First Utility.

Analysts at Jefferies said that further switching away from expensive tariffs would hit Centrica hardest.

“Centrica will be most exposed to customers switching to cheaper fixed tariffs,” they said. Centrica, as Britain’s biggest energy supplier, has 6.6 million customers on SVTs.

However, latest switching data published on Wednesday by industry group EnergyUK showed that more and more customers are returning to or staying with big suppliers.

A record 92,632 customers switched from a small to a large supplier in October and the figure remained high in November at 74,924. ($1 = 0.7901 pounds) (Editing by David Evans and Susan Fenton)

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